In June, Morgan Stanley's CFO, Ruth
Porat, hinted there would be significant cuts coming to the
bank's Smith
Barney brokerage unit. As with layoffs that occured in the
first quarter, potential job cuts would come by "pruning weak
performers," a bank spokesman said.

Originally, cuts aimed to reduce the headcount of the Smith
Barney unit from 18,500 to 17,500.

Gasparino said the "firm would not deny that Morgan is
drawing up plans for a sweeping new round of layoffs if business
conditions don’t improve." Such layoffs would include brokers,
traders and possibly staff in the investment bank.

"We are constantly evaluating the market conditions to ensure we
are right sized. We have said we currently have no plans for a
major (reduction in workforce) other then 300 or so
underperforming FAs, and that remains the case," a spokeswoman
said.